American History 1988
Chapter 360 - 349: Chicken Ribs?

Chapter 360: Chapter 349: Chicken Ribs?

"Microsoft actually has dedicated engineers supporting the development of Netscape’s browser?"

In Mountain View, Dean watched the retreating figure in amazement and raised an eyebrow.

If it were not for the Microsoft logo on the other person’s clothing, Dean would never have believed this scene.

The effect of the show was simply comical; the situation was more absurd than he had imagined.

"We encountered some issues in the development on the new system platform, so we called Seattle and asked if they could lend us a hand.

But guess what?" Clark started to laugh, "Seattle not only responded to us, but they even sent technical personnel for on-site service."

Yes, the person who had just left was a Microsoft customer support engineer.

The development of Explorer 3.0 had been confirmed to run on the Windows 95 platform.

After Dean’s last reminder, Netscape had applied to Microsoft for a software development kit.

The situation unfolded more smoothly than imagined; Microsoft did not deliberately make things difficult for them, and even provided considerable support.

Although it seemed a bit ludicrous, Microsoft’s actions were not incomprehensible.

To promote the Windows 95 system, Microsoft had invited thousands of software companies to develop its ecosystem software.

Among these companies were giants like Bit and Oracle, as well as smaller companies of modest scale such as Netscape and Future Wave.

Without a doubt, such a scale of software development community exceeded any in history.

Apple, IBM, and Sun Microsystems had all organized similar development communities, but none could compare to Microsoft.

Organizing so many developers would naturally lead to all kinds of issues, leading Microsoft to specially establish an internal technical support team.

For those smaller companies, Microsoft would even provide some subsidies to encourage them to continue developing various applications for the new platform.

This appeared to be altruism, but the future returns would more than compeansate for the initial investment.

Microsoft was no longer seeking to control all technology; instead, its strategic aim was to monopolize the position of an application software--development technology provider.

By leaving the application software to third-party companies, Microsoft just needed to firmly control the new system platform.

Controlling the underlying operating system meant holding the power to set rules and interpret standards.

So, until their perceptions of browsers changed, Netscape was no different from the other software companies in Microsoft’s eyes.

And thus the current scene unfolded; they were worried Netscape couldn’t handle the new system’s technical issues, so they decided to send someone to take a look.

"To be honest, if viewed from a third-party perspective, Microsoft’s policy is quite likable."

Dean acknowledged this point; although the ultimate result was self-serving, very few companies could genuinely act this way.

Upon hearing this, Clark’s smile took on an enigmatic quality, "Because they’re all on the same ecological chain, once the new platform succeeds, countless people will voluntarily maintain Microsoft’s interests."

"That’s right," Dean nodded, "by then there will be many people dependent on Microsoft for their livelihood."

This was the phenomenon following platform monopoly; market leaders would inevitably hold greater power.

This power didn’t stem only from Microsoft itself, but also from those relying on it for their sustenance.

For example, in later years, you could walk into any bookstore and see many tutorial books on Windows or Office.

Some training organizations would even have courses teaching Office software, complete with examination certificates.

All these people lived off Microsoft and would also actively protect Microsoft’s interests.

Look, all the various efforts Microsoft made in promoting the new system in the early days had received more than compensatory returns.

This was in fact a kind of moat; it wielded greater power than intellectual property and was more covert.

"Alright, let’s talk about Netscape instead." Dean was here today for another matter.

"You mentioned on the phone that there was a bit of a problem with our email service?"

"I don’t know whether this is good news or bad news," Clark said as he led him into a luxuriously decorated office; the conditions here at the new headquarters were much better than before.

"What do you mean?" After looking out over the streets of Mountain View from the floor-to-ceiling windows for a while, Dean returned to sit down in the sofa area.

"Our email service is too popular; its number of users has already surpassed twelve million."

"Isn’t that a good thing?" Dean asked, spreading his hands in confusion.

"It looks good on paper, but the returns from this service are not very satisfying," Clark handed him a recent financial statement.

Although Dean was a major shareholder, his energy was limited, and he could not always keep up with Netscape’s development.

Fortunately, Clark was there, exercising the rights of oversight to some extent on behalf of the shareholders.

"We have over ten million email users, but our monthly revenue is only around two million US dollars.

Dean, do you know how much Netscape has invested to ensure smooth email service for our users?"

Clark spread his five fingers and waved, "Just the server expenses alone are fifty million US dollars, and that doesn’t even include ongoing maintenance costs."

Netscape’s email was web-based, so its servers were also specially developed web servers.

As mentioned before, after obtaining financing, Netscape purchased a large quantity of enterprise-level servers from the source code suppliers.

Later, as the number of users continued to rise, they kept adding more and more servers.

Now, Netscape’s data center housed over five hundred different types of network servers.

Each of them is worth nearly a hundred thousand US Dollars, a no doubt substantial expense.

And most of these servers’ resources are taken up by email, its user base is simply too large.

5MB of free space per person, tens of millions of people together, that’s an astronomical figure.

As for value-added services, there are indeed some, look, the 2 million US Dollars on the report.

"It’s less than I imagined," Dean frowned slightly, "Only less than 3% of users have activated the premium service features."

"That’s exactly the problem!" Clark tapped his finger, "We’re about to go on the roadshow.

If we include that in the presentation documents, those potential investors will definitely hesitate!"

Fifty million dollars of investment for a return of less than 2 million a month, this doesn’t look like a good deal at all.

"What about the advertising business? I remember Netscape is negotiating with several advertisers." Dean had some idea about this.

After all, with tens of millions of users, such a large client base would naturally attract advertisers.

"Barksdale is hesitating whether to insert ads into the email because Netscape conducted a survey questionnaire.

Many users are strongly opposed to this practice, even threatening that if Netscape does this, they’ll switch to Bit’s email."

Dean was taken aback, then almost laughed. Those freeloaders were really causing trouble.

"Don’t worry about their opinions, let the negotiations with advertisers continue.

But be mindful of where the ads are placed, try not to affect user experience.

As long as it’s not too excessive, they will accept it."

Dean understood the psychology of these consumers all too well, for he had once been one of them.

Netscape’s email is free, and as long as that remains the case, then users won’t abandon it.

"Are you sure this is okay? What about over at Bit..." Clark hesitated.

"Bit’s email will have ads too," Dean said softly, and Clark no longer had any doubts.

There was no choice, when other value-added services weren’t catching up, the only option was to look to advertisers.

A completely free email service wasn’t quite realistic in the current era, servers were a major expenditure.

Worst comes to worst, once other businesses turned a profit, they could revert back to an ad-free email model.

But looking at the data in hand, Dean realized the root of the problem didn’t lie here.

"Our conversion rate is too low, which groups do these users mainly come from?"

"All sorts of people," Clark shrugged, "but they have one thing in common, they’re ordinary people."

"Ordinary people?" Dean was slightly stunned, then a realization flashed in his eyes.

"So our user base doesn’t have a high proportion from corporate clients?"

"That’s a fact, most of these businesses already have their own email systems and it’s usually hard to change that."

This involves server and data security issues, and even if Netscape’s email provided a better experience, it wouldn’t be instantly favored.

"We have to change their way of thinking," Dean began to ponder, pinching his chin, "Netscape can help them build entirely new email systems.

This includes data migration, more secure servers, and an encrypted email system.

Of course, the most important aspect is cost-effectiveness, superior service at a lower price, I believe some companies will be enticed."

Netscape could start with small companies as their decision-making tends to be more flexible.

As for large companies, Dean’s idea was to provide them with customized email services.

From system architecture to server setup, even the domains would end with these large companies’ names.

See, doesn’t that elevate their status? Outgoing emails also serve as a form of advertising, indirectly."

"Anyway, don’t worry too much about the email issue, we initially designed it to lock in users.

The browser is the core, focus on that during the roadshow, those investors will buy into it."

The roadshow is all about how you sell it, focusing on strengths and avoiding weaknesses is an unspoken rule for everyone.

"OK, our Explorer is now almost the only browser on the market.

Whether it’s Silicon Valley or Wall Street, they’re all very optimistic about Netscape’s development."

Clark had seen a lot of people lately, and they were all praising Netscape’s model.

He had a premonition that Netscape would be hugely successful on Nasdaq.

"Buddy, the roadshow is all yours," Dean patted his shoulder, knowing Clark was eager to take on the task.

"What about you, Dean, what have you been busy with?" Clark couldn’t tell if it was just his impression that this year, Dean seemed busier than any other time.

"I’m going to New York." Dean, having finished his coffee, got ready to get up and leave.

"New York?"

"To be precise, Wall Street. There’s a company going public, I’m going over to take a look."

Clark was stunned, damn! The title of Nasdaq bell-ringer wasn’t for nothing.